• The Minister of Finance explains the project to the ALT
• Objective, to achieve financial inclusion
• Total budget cost: 44 billion FCFA
25 million USD, or about 15 billion FCFA, is the amount that the transitional government will receive from the Arab Bank for Economic Development in Africa (BADEA). This line of credit was signed by the Minister of Economy, Finance and Prospects, Dr. Aboubakar Nacanabo, and the Director General of the Arab Bank for Economic Development in Africa (BADEA), Dr. Sidi Ould Tah, on the sidelines of Meetings Annual 2023 of the World Bank Group and the International Monetary Fund (WB), which took place from October 9 to 15, 2023 in Marrakech, Morocco.
7 months after the signing of the agreement between the two parties, the deputies, in their role of monitoring the actions of the government, wanted to better understand the inside and outside of the loan agreement this between the two parties. Therefore, the Finance and Budget Committee (COMFIB) of the Interim Legislative Assembly (ALT) heard the Minister of Economy, Finance and Prospects about the bill authorizing the ratification of a loan agreement between Burkina Faso and BADEA, so that Promote a project. Inclusive Finance for Access to Financial Services for People with Low Income in Burkina (PPFIB). According to the government treasurer, this BADEA loan agreement amounts to 25 million USD, or about 15 billion FCFA. Together with the Minister of Delegation in charge of the Budget, Fatoumata Bako/Traore, and a technical team from her department, Dr. Aboubakar Nacanabo presented the financing features of the project and gave clarity to COMFIB representatives. The 15 billion FCFA received is, of course, a breath of fresh air but it is only a quarter of the total budget for the implementation of PPFIB.
With a total cost estimated at more than 44 billion FCFA, this project aims primarily to strengthen the social protection and resilience of vulnerable families and include them in the economic cycle; to develop local, adapted, inclusive and accessible financial services to support the local economy; and to apply appropriate, professional and supportive methods that favor beneficiaries, as well as the sustainability of decentralized funding institutions.
Lift a million Burkinabe people out of poverty
What the government expects, according to Minister Aboubakar Nacanabo, is that the 10-year project will eventually allow 1,032. 000 people to benefit from adequate financing for the development of income generating activities, including 60% women; to train 500,000 beneficiaries in financial education; to create 7,500 micro and very small enterprises (MPTE) and improve the banking level in Burkina Faso by 8 points. The PPFIB is placed under the technical and financial supervision of the Ministry of Economy, Finance and Prospects. Its overall objective is to contribute to the development of the socio-economic situation of the population and the access of low-income populations to financial services in Burkina Faso. As a reminder, financial inclusion is the set of methods that allow everyone to have access to and effective use of a range of financial products and services at affordable costs offered by healthy institutions. The level of financial inclusion in Burkina Faso remains low. To improve this level, the Burkinabe government is determined to allow the majority of the population to have access to digital payments. Financial inclusion which includes access to finance for vulnerable household structures and bringing them into the economic cycle. To accelerate financial inclusion, the government of the transition received a loan of 15 billion FCFA by BADEA, to finance the PPFIB.
Ambéternifa Crépin SOMDA
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The PPFIB is already seeing results
L15 billion FCFA, this is the amount of this agreement that should allow the National Fund for Inclusive Finance (FONAFI) to continue financing the PPFIB. PPFIB is an integrated program that aims to integrate low-income populations into the economic cycle, through the establishment of specific mechanisms for the income-generating activities of young people and women, micro – to finance companies and small companies (MTPE) in the 13 regions. from Burkina Faso. With a total cost of 44,372,000,000 FCFA, this project has already benefited from support from the West African Development Bank (BOAD) to the tune of 10,000,000,000 FCFA and from the Swiss Cooperation for about one billion two hundred million FCFA, in the form of a donation. The signing of this agreement once again shows BADEA’s commitment to supporting Burkina Faso in its development efforts, by contributing to improving the quality of life of the population. As a reminder, FONAFI benefited from government support as part of the implementation of the Economic Recovery Fund. It received an allocation of 5 billion FCFA to support 46 microfinance institutions. 30% is given to partner microfinance institutions as a subsidy to recover after the pandemic. The 70% was given to 46 decentralized financial services (DFS) in the form of credit at subsidized rates of around 3.5% for all their clients who were severely affected by the Coronavirus.
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